A research project to understand the global effect of corporate tax reforms, funded by the European Commission’s Marie Skłodowska-Curie Action.
The taxation of multinational firms is a hotly debated subject in economic policy. For example, the 2017 tax reform in the U.S. is supposed to have large effects on businesses in an interconnected, globalized world: It substantially increased the profits of German car makers while at the same time it is expected to lure away corporate investment from other countries. Countries in the EU are working towards their own tax reforms (e.g. France, United Kingdom), in order to increase the competitiveness of local firms.
However, decreases in government income from taxation will lead to a decrease in the provision of public services such as education and health, impacting in this way the development and prosperity of human capital. In reality, in today’s globalized interconnected world, firms often trade, operate and sell across borders. Therefore, the level of economic activity of a firm in a particular country is determined by tax policies in all countries where it has affiliates. As a consequence, these policies affect the prosperity of societies in many countries.
Despite such effects and the wide-spread cross-border operations of firms, the lack of appropriate data has so far precluded a knowledge-based understanding of the international repercussions of corporate tax policies. TAXGLOBAL will provide a comprehensive analysis of the cross-border effect of firm taxation on economic activity. TAXGLOBAL will provide a new understanding of the issue by compiling unique high-quality data from Norway and analysing it in a quasi-experimental research design.